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Multi-dimensional Review of Uruguay

Volume 2. In-depth Analysis and Recommendations

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This series helps countries to identify and overcome binding constraints to achieving higher levels of well-being and more equitable and sustainable growth. The Development Pathways are based on Multi-dimensional Country Reviews, which take into account policy interactions and the country-specific policy environment through three phases. The first phase comprises an initial assessment of the constraints to development. The second phase involves an in-depth analysis of the main issues resulting in detailed policy recommendations. The third phase is designed to move from paper to action and to support government efforts in developing strategies and implementing policy recommendations.

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International integration, investment and services in Uruguay

OECD Development Centre

Uruguay has consistently pursued an investor-friendly regime, making remarkable progress in attracting FDI and achieving sustained productivity growth. The uncertainty in regional markets, however, and the changing nature of global demand pose new challenges for its international integration strategy. This chapter outlines steps that Uruguay could take to harness new opportunities in global value chains (GVCs) and to diversify to markets with fast-growing economies, particularly Asia. Uruguay should continue to pursue efforts to position itself as an exporter of business services, for reduced sensitivity to distance to final markets and economic downturns. Its regulatory profile in domestic backbone services, however, remains relatively restrictive, hampering competitiveness and the ability to capture segments of GVCs. In addition, Uruguay could make better use of international trade and investment agreements by forging modern, behind-the-border disciplines. In this regard, the chapter provides some guidance on how to develop GVC-friendly Regional Trade Agreements. Given the widening remit of this “deep integration” agenda, institutional co-ordination could be improved to maximise the effectiveness of its policy efforts.

English

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